Watkin Jones PLC (LON:WJG) Chief Executive Officer Mark Watkin Jones caught up with DirectorsTalk for an exclusive interview to discuss the company’s background in the purpose-built student accommodation market, their unique business model and their listing on the AIM market
Q1: Now you obviously have a very successful company, what has driven the strong growth since 1999?
A1: Well, Watkin Jones had our first student accommodation project in 1999 and we saw the opportunity there that students are demanding more from the accommodation they lived in and we’ve just followed that through since that time. Since that time, we’ve built over 28,000 beds across 88 sites and we’ve got a number of other developments in our pipeline looking forward.
Q2: Brilliant. Why is the purpose-built student accommodation market so attractive?
A2: I think because there’s still a lack of supply against the demand in the market between the universities and private purpose-built stock is still only catering for about 25-26% of full-time students. What we are seeing is students moving away from the typical house of multiple occupation, which many will remember as ‘The Young Ones’ type of student living and they want sort of securer, well maintained purpose-built accommodation because I think students are paying a lot more for their education now and they see where they live as just part of that cost really.
Q3: Do you think this success can be replicated into the private rented sector market?
A3: Yes I do because I think we can see that a lot of the students, particularly the students that are graduating, looking at their options, where they live once they’ve graduated and the private rented sector would certainly suit that type of customer. I also think that people around the UK move around a lot more in terms of moving jobs, historically we sort of all went back to a particular town or city and stayed there and again probably a generation back, it was always you had to buy your own house and try and get on the property ladder, I don’t think that is the be all and end all for current youngsters and quite frankly I don’t think they can follow them either so there’s a mixture of both.
Q4: Mark, can you describe your business model and what makes Watkin Jones PLC unique?
A4: I think what we’ve got is a good business model where we identify opportunities and we work with the institutional partners that we’ve built great relationships with over the years. They see us as a conduit to give them access to an asset class that they struggle to get into in other ways without buying big portfolios of stock and because we do an end-to-end solution. So we identify the site, we progress the planning, we then do the building work and finally we offer a full management service post completion, in many ways it gives the institutions a one stop shop through the whole part of the business.
Q5: Now you touched on this slightly, can you provide some flavour as to the types of institutional partners that you actually work with?
A5: It’s pretty much the sort of major institutions that have got access to the asset class but for confidentiality we’re not allowed to specifically name people. There’s still a huge weight of money trying to come into the sector, there’s new entrants constantly coming in, which is great for us, and we’re adding to our client base continuously.
Q6: Watkin Jones PLC floated on the AIM market this morning, how will the listing benefit the group?
A6: I think, again, I’m always very keen to make sure that the business has got a sense of purpose and to keep driving it forward. There are opportunities for growth, I think it also aligns management greater to my vision of where I want to take the business and we’re excited, I think it also aligns us with our existing clients as well and future clients will raise our profile with them.
